08.12.202516:25 Analisis Forex & Kajian: Level and Target Adjustments for the U.S. Session – December 8th

The euro and the British pound today followed a Mean Reversion scenario, but there were no major or reverse movements. Using Momentum, I traded the Japanese yen, where it was possible to capture a decent move.

A sharp rise in German industrial production helped the euro maintain its positions against the U.S. dollar during the first half of the day, but it did not lead to fundamental changes in the market balance. The published data exceeded even the most optimistic forecasts, restoring investors' confidence in the stability of the German economy. A 1.8% rise in Germany's manufacturing sector traditionally has a significant impact on the euro's dynamics. Increased orders, higher production volumes, and expanded manufacturing capacity indicate favorable economic conditions and attract investment. However, despite today's positive trend, experts remain cautious in their forecasts.

In the second half of the day, we will only see U.S. factory orders data, which is unlikely to significantly help the dollar rise. The reason lies not only in the expected moderate dynamics of the indicators but also in the already prevailing negative sentiment of investors toward the U.S. currency. The dollar needs not just to meet expectations but to significantly exceed them to reverse the current trend. The market has already priced in many factors putting pressure on the dollar, including further potential interest rate cuts by the Federal Reserve this week. In such a situation, even moderately positive industrial orders data may be perceived only as a temporary respite, rather than a signal of sustained growth.

However, surprises cannot be ruled out. In the event of unexpectedly strong U.S. factory orders, the dollar may receive short-term support. Even this impulse, however, is likely to be offset by the overall negative backdrop.

If the data is strong, I will rely on the Momentum strategy. If the market reaction is muted, I will continue using the Mean Reversion strategy.

Momentum Strategy (Breakout) for the Second Half of the Day

EUR/USD

• Buy on a breakout above 1.1678, targeting 1.1703 and 1.1726.
• Sell on a breakout below 1.1649, targeting 1.1623 and 1.1590.

GBP/USD

• Buy on a breakout above 1.3333, targeting 1.3353 and 1.3388.
• Sell on a breakout below 1.3315, targeting 1.3300 and 1.3270.

USD/JPY

• Buy on a breakout above 155.70, targeting 156.15 and 156.55.
• Sell on a breakout below 155.40, targeting 155.08 and 154.77.

Mean Reversion Strategy (Pullback) for the Second Half of the Day

EUR/USD

• Look to sell after a failed attempt to break above 1.1674 and return below it.
• Look to buy after a failed attempt to break below 1.1640 and return above it.

GBP/USD

• Look to sell after a failed attempt to break above 1.3337 and return below it.
• Look to buy after a failed attempt to break below 1.3310 and return above it.

AUD/USD

• Look to sell after a failed attempt to break above 0.6651 and return below it.
• Look to buy after a failed attempt to break below 0.6632 and return above it.

USD/CAD

• Look to sell after a failed attempt to break above 1.3834 and return below it.
• Look to buy after a failed attempt to break below 1.3811 and return above it.